The diagram below shows demand and supply curves for some perfectly competitive market. FIGURE 16-2 -Refer to Figure 16-2.Suppose that the marginal benefit curve (MB)includes all social benefits and that there is a positive externality in production.In this case,________ for allocative efficiency. A)P₁ and Q₁are appropriate B)the price P₁ is appropriate but the quantity Q₁is too low C)the price P₁ is appropriate but the quantity Q₁is too high D)the price P₁ is too low and the quantity Q₁is too high E)the price P₁ is too high and the quantity Q₁is too low

Question

Quizplus · Accepted Answer

The Answer of The diagram below shows demand and supply curves for some perfectly competitive market. FIGURE 16-2 -Refer to Figure 16-2.Suppose that the marginal benefit curve (MB)includes all social benefits and that there is a positive externality in production.In this case,________ for allocative efficiency. A)P₁ and Q₁are appropriate B)the price P₁ is appropriate but the quantity Q₁is too low C)the price P₁ is appropriate but the quantity Q₁is too high D)the price P₁ is too low and the quantity Q₁is too high E)the price P₁ is too high and the quantity Q₁is too low

The Diagram Below Shows Demand and Supply Curves for Some